DCIT, New Delhi V. M/s. Jai Siyaram Commodity Trading P. Ltd., New Delhi

ITA 3814/DEL/2010

• Counselvise Citation: 381420114 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR SENIOR
• Assessee Lawyers: ANIL K SUJANTI
• Keywords: Deemed to accrue or arise in india
• Section: 115JB; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3814/DEL./2010 (ASSESSMENT YEAR : 2007-08) DCIT, CIRCLE 4 (1), VS. M/S. JAI SIYARAM COMMODITY TRADING P. LTD., NEW DELHI. UPPALS PLAZA, M 6, 5-G, 5T FLOOR, JASOLA DISTRICT CENTRE, NEW DELHI. (PAN : AABCJ6191P) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL K. SUJANTI, CA REVENUE BY : SRI B.R.R. KUMAR, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE ARISES OUT OF THE ORDER OF CIT (APPEALS)-VII, NEW DELHI DATED 28.06.2010. THE GR OUNDS OF APPEAL READ AS UNDER :- 01. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRO NEOUS & CONTRARY TO FACTS & LAW. 02. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN ALLOWING REBA TE U/S 88E BEFORE CALCULATING THE BOOK PROFIT UNDER SECTION 11 5JB OF THE I.T. ACT. 2.1 THE LD. CIT (A) IGNORED THE FACT THAT AS PER TH E PROVISIONS OF SECTION 115JB REBATE U/S 88E IS NOT A LLOWABLE FOR ITA NO.3814/DEL./2010 2 ARRIVING AT THE BOOK PROFIT AND THE TAX UNDER SECTI ON 115JB IS GREATER THAN TAX AT NORMAL RATES. 03. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, OR TO AMEND ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 2. THE ASSESSEE FILED THE RETURN FOR THE YEAR IN TH E PRESCRIBED FORM NO.ITR-6. THE ASSESSEE ENGAGED IN THE BUSINESS OF DEALING IN TRADING IN SHARES, COMMODITIES AND DERIVATIVES. THE ASSESSEE WORKED OUT THE TOTAL INCOME AT RS.5,00,39,470/- UNDER THE NORMAL PROVISI ONS OF INCOME-TAX ACT. THE TAX WORKED OUT ON THIS INCOME WAS RS.1,50,11,84 1/-. THE ASSESSEE HAS CLAIMED REBATE UNDER SECTION 88E OF RS.1,45,85,122/ -. THE ASSESSEE ALSO WORKED OUT THE INCOME AS PER MAT PROVISIONS AT RS.3 5,47,031/-. THE ASSESSING OFFICER WAS OF THE VIEW THAT AFTER REDUCI NG THE REBATE UNDER SECTION 80E, THE TAX PAYABLE BY THE ASSESSEE AS PER NORMAL PROVISIONS OF THE ACT WAS ONLY RS.4,78,779/- AND THE SAME IS LESS THAN THE TA XES BECOME PAYABLE AS PER DEEMED INCOME UNDER SECTION 115JB OF RS.39,72,675/- . ASSESSING OFFICER RAISED THE DEMAND ACCORDINGLY. THE CIT (A) GRANTED THE RELIEF TO THE ASSESSEE BY HOLDING AS UNDER :- 4.4 IN THE INSTANT CASE, THERE IS NO DISPUTE OVER THE FACT THAT THE TOTAL INCOME DECLARED BY THE ASSESSEE IS TO THE EXT ENT OF RS.5,00,39,470/- AND THE TAX PAYABLE THEREON AT THE NORMAL RATE IS RS.1,50,11,841/-. THE BOOK PROFIT AS PER THE PRO VISIONS OF SECTIONS 115JB IS RS.3,54,70,313/-. THIS MAKES IT C LEAR THAT THE INCOME-TAX PAYABLE IS NOT LESS THAN 10% OF THE BOOK PROFIT DECLARED BY THE ASSESSEE WHICH IS RS.35,47,037/-(BE ING 10% OF BOOK PROFIT OF RS.3,54,70,313/-). THEREFORE THE PRO VISIONS OF SECTION 115JB ARE NOT APPLICABLE TO THE INSTANT CAS E. IT IS ALSO SIGNIFICANT TO MENTION THAT THE PROVISIONS OF SECTI ON 115JB OF THE ITA NO.3814/DEL./2010 3 ACT REFER TO THE INCOME-TAX PAYABLE ON TOTAL INCOME AND THEY DO NOT REFER TO THE TAX PAYABLE AFTER TAX REBATE. IF T HE INTENTION OF LEGISLATURE WOULD HAVE BEEN SO, THERE MUST HAVE BEE N SOME CLARIFICATION OR EXPLANATION IN THIS REGARD. IN VIE W OF THE AFORESAID, I AM OF THE CONSIDERED VIEW THAT THE PRO VISIONS OF SECTION 115JB ARE NOT APPLICABLE TO THE INSTANT CAS E. 4.5 NOW IT IS TO BE EXAMINED AS TO WHETHER THE ASS ESSEE WOULD BE ENTITLED TO TAX REBATE U/S 88E OF THE ACT OR NOT . IT IS OBSERVED THAT THE A.O. HAS NOT RAISED DOUBT EITHER ABOUT THE ELIGIBILITY OF THE ASSESSEE TO GET TAX REBATE U/S 88E OR ABOUT THE FULFILLMENT OF THE CONDITIONS PRESCRIBED THEREIN. IN VIEW OF THE A BOVE, IT IS FAIR TO CONCLUDE THAT THE ASSESSEE WAS ENTITLED TO TAX R EBATE U/S 88E OF THE ACT. SUBJECT TO ABOVE REMARKS, THE ASSESSING OFFICER IS DIRECTED TO ALLOW TAX REBATE U/S 88E OF THE ACT. A S A RESULT, GROUNDS OF APPEAL NOS.1 TO 4 ARE ALLOWED. 2. LEARNED DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. THE LEARNED AR SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR O F THE ASSESSEE BY THE DECISION OF ITAT, BANGALORE BENCH A IN THE CASE O F M/S. HORIZON CAPITAL LTD. VS. ITO DATED 16.07.2010 REPORTED IN 2010-TIOL -605-ITAT-BANG. 3. WE HAVE HEARD BOTH THE SIDES. AFTER HEARING, WE FIND THAT THE ISSUE IS COVERED BY THE DECISION OF ITAT, BANGALORE BENCH A , CITED SUPRA. THE ITAT IN THE SAID DECISION HAS HELD AS UNDER :- 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS, WE FIND THAT THE ONLY DISPUTE IS WHETHER THE REBATE OF STT PAID BY THE ASSESSEE IS ALLOWABLE FRO M THE INCOME TAX COMPUTED AGAINST THE TOTAL INCOME COMPUT ED UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961. THE TERM TOTAL INCOME HAS BEEN DEFINED UNDER THE INCOME TAX ACT, 1961 AS THE TOTAL AMOUNT OF INCOME REFERRED TO IN SECTION 5, COMPUTED IN THE MANNER LAID DOWN IN THIS ACT. SECTION 5 OF THE INCOME TAX ACT, 1961 DEFINES THE SCOPE OF THE TOTAL INCOME OF A RESIDENT OR A NON-RESIDENT PERSON. THE TOTAL INCOME OF THE ITA NO.3814/DEL./2010 4 ASSESSEE HAS TO BE COMPUTED UNDER THE REGULAR PROVI SIONS OF THE INCOME TAX ACT, 1961 AND IN THE CASE OF A COMPA NY IT CAN BE ARRIVED AT BOTH UNDER THE REGULAR PROVISIONS OF THE INCOME TAX ACT AND UNDER THE DEEMING PROVISION UNDER SECTION 115JB OF THE ACT. I T HAS BEEN PROVIDED THAT WHERE THE INCOME TAX PAYABLE BY THE A SSESSEE ON THE TOTAL INCOME COMPUTED UNDER REGULAR PROVISIONS OF THE ACT IS LESS THAN 7 % OF THE BOOK PROFIT PREPARED IN AC CORDANCE WITH THE COMPANIES ACT, THE HIGHER OF THE TAX I.E. THE BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF TH E ASSESSEE AND TAX PAYABLE BY THE ASSESSEE SHALL BE THE AMOUNT OF INCOME TAX AT THE SPECIFIED RATE. WHEN WE LOOK AT THE PROV ISIONS OF SECTION 87 OF THE INCOME TAX ACT, 1961, WE FIND THA T THE REBATE IS TO BE GRANTED FROM THE AMOUNT OF INCOME TAX CHAR GEABLE ON THE TOTAL INCOME OF THE ASSESSEE. THE INCOME TAX IS COMPUTED AFTER ARRIVING AT THE TOTAL INCOME OF THE ASSESSEE AND SECTION 87 OF THE INCOME TAX ACT, 1961 DOES NOT DIFFERENTIATE BETWEEN THE TOTAL INCOME COMPUTED UNDER THE REGULAR PROVISIONS OF THE ACT OR UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961. EVEN THOUGH THE SUB SECTION (1) OF SECTION 115JB STARTS WITH THE NON- ABSTANTE CLAUSE, NOT WITHSTANDING ANYTHING CONTAIN ED IN ANY OTHER PROVISION OF THIS ACT, WE FIND THAT IT IS ON LY FOR THE COMPUTATION OF THE TOTAL INCOME AND THE SUB SECTION (5) OF SECTION 115JB PROVIDES FOR A SAVING CLAUSE THAT THE REST OF THE PROVISIONS OF THE INCOME TAX ACT RELATING TO DEDUCT IONS, REBATE, ETC THE OTHER PROVISIONS OF THE INCOME TAX ACT SHAL L APPLY. THEREFORE IT IS CLEAR THAT THE PROVISION OF SECTION S 87 AND 88A TO 88E ALSO APPLY AFTER THE TOTAL INCOME IS COMPUTE D UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961 AND SINCE THE ASSESSEES TOTAL INCOME INCLUDES THE INCOME FROM TH E TAXABLE SECURITIES TRANSACTIONS, THE ASSESSEE IS ENTITLED T O A DEDUCTION OF THE AMOUNT EQUAL TO THE STT PAID BY HIM IN RESPE CT OF THE TAXABLE SECURITIES TRANSACTIONS ENTERED INTO IN THE COURSE OF BUSINESS DURING THE PREVIOUS YEAR. THE ASSESSEES A PPEAL IS THUS ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO GIVE REBATE UNDER SECTION 88E FOR THE STT PAID BY THE AS SESSEE. ITA NO.3814/DEL./2010 5 CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE COORDINATE BENCH, WE SUSTAIN THE ORDER OF THE CIT (A) AND DISMISS THE APPEAL OF THE REVENU E. 4. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2012. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF JANUARY, 2012/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-VII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.